September 10, 2004
Producer Prices Drop, Trade Gap Narrows (Tim Ahmann, 9/10/04, Reuters)
U.S. producer prices dropped unexpectedly last month as the cost of gasoline plunged and prices of food and vehicles fell, according to a government report on Friday that showed inflation pressures under wraps.
A separate report showed the nation's trade deficit narrowed more than expected in July as imports declined for the first time in 10 months and exports leapt higher. Still, at $50.1 billion, it was the second biggest gap on record.
U.S. bond prices rose and the dollar slipped as the price report buttressed expectations that the Federal Reserve will take a break at some point this year from the rate-rise cycle it initiated in June. [...]
Economists also said a slimmer trade gap could boost economic growth in the third quarter.
The producer price index, a gauge of prices received by farms, factories and refineries, fell 0.1 percent in August, the Labor Department said. The core index, which excludes volatile food and energy prices, also dropped 0.1 percent -- the first decline since February.
Economists had expected both figures to be up 0.1 percent.
Anyone want to buy a bunker full of gold? Posted by Orrin Judd at September 10, 2004 1:27 PM